5 Ways Microsoft Can Get Back on Track in 2013: Break Up the Company
To build a better brand, Microsoft may need to cut some products loose.
Editor's note: This is Part 2 of a 5-part series that will be published over the course of this week. Stay tuned!
Selling off its properties may seem like a step backward at first, but if handled correctly it would allow Microsoft to make a sizable gain, while helping it reposition its best products. Quite frankly, it seems that Microsoft is fighting battles all over the tech industry and is losing in every hemisphere. It faces off against Apple (NASDAQ:AAPL) in devices, Google (NASDAQ:GOOG) in search engines, and even Yahoo (NASDAQ:YHOO) as an Internet portal through MSN. While some of Microsoft's ventures seem to be profitable and very much in line with Microsoft's new dedication to products and services, it often seems as though the company has spread itself too thin to become the king of any one market.
For starters, all of its major online services need to go. Bing, Internet Explorer, we're looking at you. According to the company's latest 10-K, Microsoft's online services division (or OSD) incurred over $8.1 billion in operating losses, but only managed to generate $2.8 billion in revenues. The company maintains that $6.2 billion of this loss refers to a goodwill impairment charge, which reflects the depreciation of its brands. The products of its OSD department are now valued at a mere $223 million, reflecting a large attrition of consumer respect.
Looking at the numbers, it makes perfect sense. Microsoft poured money into marketing campaigns to renew interest in Bing and Internet Explorer, but neither are gaining ground against their chief competitors. Despite the Bing it On campaign, Google still maintains a whopping 88% global market share as a search engine against Bing's pathetic 4.2%. According to Stat Counter, Google is also ahead of Internet Explorer in search engine usage 35.72% to 31.23%, and is increasing its lead on a monthly basis.
The online services division may be the only department that might need to get the ax all together, but it's likely there are some more Microsoft products that aren't pulling their weight. By selling off its less than essential properties, Microsoft will be able to repurpose its resources and energy into strengthening its devices, and rebuild its brand into something consumers could be proud of. Although having a vast empire has been profitable in the past, for the moment perhaps less is more.
Be sure to check out the rest of this series here:
5 Ways Microsoft Can Get Back on Track in 2013: Release the Xbox 720 Early